Maintain long positions as the commodity is developing a consolidation phase. The FCPO ended the latest session on a weak tone – it shed MYR32 to settle at MYR2,221. The low and high were posted at MYR2,216 and MYR2,258. The commodity has been undergoing a consolidation phase over the recent sessions, after it tested the MYR2,300 round figure on 26 Aug on the back of an overbought RSI reading. At this juncture, there is no sufficient negative price action to suggest that the said consolidation phase will develop in the form of a deep retracement. Hence, we are keeping our positive trading bias.

As there is no strong evidence to indicate that the bulls have lost control over the price trend, traders are advised to remain in long positions. We initiated these at MYR2,256, the closing level of 22 Aug. For risk management purposes, a stop-loss can be placed below the MYR2,150 level.

The immediate support is expected at MYR2,150, the low of 20 Aug. This is followed by MYR2,100, near the 200-day SMA line. Meanwhile, the immediate resistance is set at MYR2,344, the high of 7 Feb. This is followed by MYR2,400, the next round figure.

Source: RHB Securities Research - 30 Aug 2019